MEA refers Russia’s protest over demonetisation to Finance Ministry

The Ministry of External Affairs (MEA) today said that the letter of Russian Ambassador to India over the cash crunch has been referred to the Department of Economic Affairs, Ministry of Finance, and assured that all problems will be taken care of.

Manish Jha, New Delhi [ Updated: December 07, 2016 15:12 IST ]

File pic - New Rs 2,000 note on display

The Ministry of External Affairs (MEA) today said that the letter of Russian Ambassador to India over the cash crunch has been referred to the Department of Economic Affairs, Ministry of Finance, and assured that all problems will be taken care of.

The development comes a day after it was reported that Russia has lodged a strong protest over cash shortage affecting the functioning of its embassy in New Delhi and also threatening retaliatory action.

Pressing the External Affairs Ministry to intervene to get restrictions on cash withdrawals by Russian diplomats lifted, its Ambassador Alexander Kadakin had on December 2 written to it saying embassy's normal functioning was getting impacted with the inadequate amount limit of Rs 50,000 per week.

“Please just imagine if we in Moscow mirror this order of SBI (State Bank of India) when 50,000 roubles will not be enough to pay for a decent dinner in a restaurant, not to mention functioning of such a big embassy as ours in New Delhi or India’s in Moscow,” the letter reads.

“SBI informed the Embassy that the cash withdrawal limit available to the Embassy is now Rs 50,000 per week under the government of India directives with no exceptions unless otherwise advised by the RBI. Such an amount is totally inadequate as regards the embassy’s salary and operational expenditure requirements,” he wrote.

State Bank of India has informed the Embassy that the cash withdrawal limit available to the Embassy is now Rs 50,000 per week under the Government of India directives with no exceptions unless otherwise advised by the RBI.

There are approximately 200 staffers (excluding family members) in Russian diplomatic mission in the national capital and with the new withdrawal limit the cash at hand for one person comes to Rs 250 a week.

Russia is not the first one to complain about the demonetization-induced restrictions. Earlier, the Dean of Diplomatic Corps had also raised the issue with the MEA.

It is also understood that some other countries like Ukraine and Kazakhstan have also raised the issue with the ministry.

After the demonetization last month, MEA had said that it had approached Department of Economic Affairs over issues including those related to maintaining sufficient flow of funds to diplomatic missions and was awaiting a decision by the Finance Ministry regarding it.